The U.S. Chamber and the Chamber’s U.S.-UK Business Council are among approximately 20 financial and professional services organizations that have joined together as the British American Finance Alliance (BAFA) to propose a vision for forward-looking U.S.-UK regulatory cooperation in the financial sector. Today, the Alliance launched its initial paper outlining a series of suggestions for future U.S.-UK economic engagement on services issues, especially relevant in the context of the ongoing trade negotiations. Both the Chamber’s Center for Capital Markets Competitiveness (CCMC) and its International Affairs Division have been engaged with BAFA from the outset to promote our members’ interests.
As the UK leaves the EU, there is a historic opportunity to shape the future U.S.-UK regulatory, trade, and investment relationships, and BAFA can contribute business expertise and solutions across a range of important policy areas. Specifically, BAFA has recently published a scoping paper (linked above) that presents proposals for regulatory cooperation with the U.S.-UK Financial Regulatory Working Group.
The interconnectedness of U.S. and UK financial markets and the transatlantic flow of capital are the bedrock of global financial markets. As the UK leaves the EU single market, and amid ongoing U.S.-UK trade negotiations, the Chamber has consistently worked with U.S. and UK regulators to advocate for greater cross-border cooperation and to promote regulatory equivalence on a wide-range of financial services issues. We also continue to work with UK and EU policymakers to promote a close long-term trading relationship across the Channel to minimize economic disruptions for U.S. firms whose investments and interests span all of Europe.
In September 2018, a number of U.S. and UK business organizations came together to form the UK-U.S. Financial and Related Professional Services Industry Coalition. Today, we are delighted to be relaunching this group as the British American Finance Alliance (BAFA).
BAFA believes that the U.S. and the UK have a historic opportunity in redefining their regulatory and trade and investment relationships. It is our goal that this unique alliance enhance the role the financial and professional services industry plays in promoting growth, innovation and employment in the U.S. and the UK, especially as we focus on COVID-19 recovery.
Our ambition is for BAFA to become the premier industry platform to contribute business expertise into the U.S.-UK Financial Regulatory Working Group (FRWG), providing a unified voice for a broad and diverse industry that contributes substantially to our respective economies. For example, in the UK financial and related professional services directly employs 2.3 million individuals; in the U.S., 6.5 million are employed in financial services and insurance with millions more in related professional business services.
BAFA also aims to offer an industry perspective to the overall and complementary trade and investment discussions between the U.S. and the UK.
To this end, we are delighted to publish this scoping paper on the future of U.S.-UK regulatory dialogue.
In today’s economy, many barriers preventing cross-border trade and investment in financial and professional services are regulatory in nature. For our industry, achieving compatibility of regulatory standards is therefore an essential component in the re-defining of the U.S.-UK relationship. A robust regulatory dialogue will help achieve this.
In that spirit, the scoping paper presents BAFA’s vision for bilateral regulatory cooperation through the FRWG.
We believe the FRWG can play a key role in promoting effective and pragmatic solutions to regulatory challenges and helping achieve coherent standards. Some of these are ‘live’ issues. But a truly robust regulatory cooperation mechanism should be built to process future or fast evolving issues such as technology.
Existing issues, discussed in the paper, include:
• Market conduct;
• Market integrity;
• Data transfer;
• Audit and accounting:
• Cyber security and operational resilience
The FRWG should also consider international or multilateral issues including global financial stability.
Our interest in regulatory cooperation is grounded in our desire to see improved and more consistent regulatory outcomes. More compatible regulatory outcomes in turn provide a strong foundation for cross-border investment, growth and job creation across the entire economy—including for agriculture, manufacturing and services. We believe the model for regulatory cooperation set out in our paper will provide a robust foundation towards these shared goals.